‘If the buyers do not increase price it will hurt our competitive edge and we have to learn to say no to the low price offered’ RMG manufacturers have termed the just concluded 2015 the year of “buyers’ confidence building” as it was a great challenge for the apparel sector to restore retailers’ confidence in workplace safety after the disastrous Rana Plaza building collapse. Following the Rana Plaza building collapse, which killed 1,135 workers, and Tazreen Fashions fire incident, people across the globe raised questions about the RMG workers’ rights and safety, plus electrical and structural integrity. After the two tragic incidents, the global buyers focused on safety issues and formed Accord on Fire and Building Safety in Bangladesh and Alliance for Bangladesh Worker Safety to promote safety standards in the country’s RMG sector. Retailers’ platforms inspection found less than 2% factory vulnerable for worker safety while 38 factories has already been shut over safety issues. “After the collapse of Rana Plaza, it was our prime task to make the buyers understand that now Bangladesh is now safe for workers,” BGMEA Senior Vice President Faruque Hassan told the Dhaka Tribune.
The RMG sector has been able to restore the buyers’ confidence through improvement of safety standard to ensure safer workplace, said the sector people. Through safety assessment, the sector has been able to make the buyers understood that Bangladesh is now a safer place for the workers as safety assessment found less than 2% factory risky, which had been shut, said Hassan. In 2016, Bangladesh will focus on skill development, efficiency improvement, productivity and use of modern technology to save the environment, Hassan added. Another challenge for the next year is to relocate the shared building factories to make them full-fledged compliant, which need low cost financing. “In 2016, buyers will come to Bangladesh and place more orders as they are satisfied with the improvement of safety standards made during the last two years,” said Mohammad Hatem, former vice president of BKMEA. Our focus will be on negotiation to increase prices and manufacturers has to be cautious in setting price as we have invested lot of money to improve safety, said Hatem. “If the buyers do not increase price it will hurt our competitive edge and we have to learn to say no to the low price offered,’’ he added. Apparel sector has passed the year 2015 through restructuring in safety standards and demand volatility in global demands of apparel products, Mustafizur Rahman, executive director of the Centre for Policy Dialogue (CPD) told the Dhaka Tribune. In the compliance issues, the sector has made progress and relocated factories but the small manufacturers suffered due to lack of funds and work orders, while big industry has expanded their business, said Rahman. Global competitive edge has been increasing day by day and some of competitors want to enter in China Plus One, that is the sector has to be competitive by reducing the cost of doing business, said Rahman. He also urged the government to come up with uninterrupted electricity supply and gas connection along with better infrastructure facilities. He urged the sector people to concentrate on product and market diversification along with the product upgradation as Vietnam a major competitor of Bangladesh is being connected with the Trans-Pacific Partnership (TPP). “The progress in safety standard is satisfactory and due to the inspection and reform, fire incident came down to 80%,” M Rabin, Managing Director of Alliance for Bangladesh Worker Safety told the Dhaka Tribune. If the remediation is fully completed, I hope that there will have no mishap in the future, said Rabin. Arranging the low cost fund for the SME will be a big challenge for the completion of remediation works. Although the Alliance is providing some fund but more is needed from the stakeholders as well as the government, he added. Bangladesh earned US$25.49bn from RMG export in the last fiscal, which is over 81% of the total export earnings and it contributes over 10% to GDP. The ready-made garment sector has 40 lakh workers, of which 80% are women, mostly from rural areas.
